The announcement last week that Chevron may be interested in acquiring some of the remaining $33 billion in energy assets from the controversial carve up of Yukos, once Russia's largest oil company, has put the company at the center of a dangerous, high-stakes game involving unlawful state expropriation, political prisoners and serious litigation risks, all of which raise a number of urgent questions for company shareholders to consider ("Chevron allegedly nibbling at Yukos," Feb. 10).

Of primary concern are the enormous ethical and financial dilemmas posed by the next Yukos auction, which represents little more than the fencing of stolen property following the persecution and imprisonment of the former head of Yukos, my client, Mikhail Khodorkovsky. Shareholders should consider not only the risk these stolen assets carry, but also the reason why the Russians have pre-emptively announced Chevron's interest in them (Chevron itself has neither confirmed nor denied participation).

It is highly suspicious that the news about Chevron's possible interest in Yukos came not from either company, but rather from one Russian bankruptcy official, as well as the CEO of state-owned Gazprom, which will likely take home the lion's share in what is sure to be a rigged auction. Announcing this news just four days after new, trumped up charges were applied against Khodorkovsky, the Kremlin appears desperate to use Chevron's good name to paint these proceedings with an image of credibility in response to the growing chorus of outrage from the international community.

The widespread disapproval of the Kremlin's attack on Khodorkovsky and Yukos has reached the highest levels in both Europe and North America, including the U.S. State Department. On Feb. 5, State Department spokesman Sean McCormack stated that "the continued prosecution of Mikhail Khodorkovsky and the dismantlement of Yukos raise serious questions about the rule of law in Russia. ... Many of the actions in the case against Khodorkovsky and Yukos have raised serious concerns about the independence of courts, sanctity of contracts and property rights, and the lack of a predictable tax regime." U.S. Rep. Tom Lantos, D-San Mateo, chairman of the House International Relations Committee, among other members of the House and Senate, has similarly denounced the latest round of attacks on Khodorkovsky and Yukos.

To truly grasp the risk and liability posed by Chevron's possible acquisition of Yukos assets, take a look at the history of the Kremlin's campaign. In a few short years, Russia's largest private taxpayer and most successful and well managed oil company, Yukos, has been brought to the brink of ruin, all because Khodorkovsky made two "mistakes." First, he got involved in politics through the support of opposition parties and civil society NGOs. Second, he threatened state-owned energy companies by out-competing them, advocating a free market for the Russian energy industry and welcoming investments by U.S. partners, such as ExxonMobil and, ironically, Chevron.

The Kremlin's elimination of this political, economic and ideological threat was brutal and lawless. As meticulously detailed in a white paper we released last week, the Russian authorities committed a grave series of violations of Russian law and due process to imprison Khodorkovsky and confiscate his company's assets. They piled on retroactive tax assessments that eventually reached $28 billion - even though that figure meant levying an absurd $8 of tax for every $1 of revenue in 2004. With a straight face, the Kremlin declared Yukos insolvent and, in violation of Russian law, took over the company's core production unit for a fraction of its real value, in an auction riddled with illegalities. This was the biggest theft in the annals of the global oil industry, and it happened in broad daylight.

Now the Kremlin wants what is left of Yukos, and has charged Khodorkovsky with money laundering to serve as a cover. He is accused of laundering an astounding $23 billion -- and supposedly did so by managing to hide those funds from rigorous audits and due diligence by foreign accounting and legal professionals who reviewed Yukos's books to prepare for a major U.S. investment in the company.

Chevron may be eager to be back in the Kremlin's good graces after it suddenly lost out on the bid for the $20 billion Shtokman gas development, and there are a number of other potential development projects that could entice Chevron to overlook this ethical and legal dilemma.

Regardless of how or why the Russians have named Chevron to help endorse this injustice, shareholders need to stand up now and demand more information regarding these potential bids, and urge Chevron's board of directors not to be drawn into a round of Russian roulette with the Kremlin.

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